Problem - Common stock-$26 par value, 48,000 shares authorized, 38,000 shares issued and outstanding $ 988,000 and Paid-in capital in excess of par value, common stock 60,000 and Retained earnings 260,000. Total stockholders' equity $ 1,308,000.
In year 2012, the following transactions affected its stockholders' equity accounts.
Jan. 2 Purchased 3,200 shares of its own stock at $26 cash per share.
Jan. 7 Directors declared a $2 per share cash dividend payable on Feb. 28 to the Feb. 9 stockholders of record.
Feb. 28 Paid the dividend declared on January 7.
July 9 Sold 500 of its treasury shares at $31 cash per share.
Aug. 27 Sold 2,700 of its treasury shares at $24 cash per share.
Sept. 9 Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record.
Oct. 22 Paid the dividend declared on September 9.
Dec. 31 Closed the $12,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
Required:
1. Prepare journal entries to record each of these transactions for 2012.
2. Prepare a statement of retained earnings for the year ended December 31, 2012.
3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2012.